Question

A company had the following transactions during September, the first month of its operations: Issued 50,000 shares of common stock in exchange for $600,000. Purchased land for $400,000, using a $150,000 cash down payment and signing a note payable for the balance. Received $5,000 from a customer for services to be performed in December. Made a $60,000 payment on the note payable from the purchase of the land. Total monthly sales: Cash sales $50,000 Credit Sales: $17,000 Purchased equipment on credit for $63,000. Collected $8,000 from customers on account. Paid $2,000 for September employee wages. Received a utility bill for $500 which will be paid next month. What is net income for the month of September

Answer 1

Net income for the month of September is $451,000

Step-by-step explanation:

Particulars Amount

Issue of common stock 600,000

Receipt from customer 5,000

Cash sales 50,000

Collection from customer 8,000 663,000

Less:

Cash down-payment made (150,000)

Payment made on notes payable (60,000)

Employee wage paid (2,000)

Cash balance as at end of Sep. 451,000